Only one client is more detrimental to your organization’s well-being than the dissatisfied one who complains – and that’s the one who is dissatisfied and does not complain. The client who complains is giving your organization a chance to make amends, to make good on perceived promises, and to create a raving fan. However, the client who does not complain and simply leaves and never comes back will leave a mark. That mark is on your wallet. Can you afford to lose that client?
Consider the following:
- He/she will tell an average of 11 people about the negative experience. This will make it more difficult for your agency to sell to the client’s friends.
- It will cost your agency seven to nine times more to replace a client than it would to retain one.
- A new client, on average in the first year, will generate only 33% of the profit that you earned from the former client.
- A former client has only a 9% chance of returning to your agency.
- You will lose that client’s lifetime revenue if he/she moves to a competitor.
The insurance industry spends a king’s ransom every year in sales and marketing to attract new clients – an important and crucial activity to produce future growth and profitability. On the other hand, what do you spend to solve clients’ complaints in a manner that “Wows” them and causes them to become raving fans? If your agency is like most businesses, probably not much.
To understand the impact of handling clients’ complaints to “Wow!” them, let’s look at word-of-mouth advertising. As the original advertising medium, it’s free and comes in two forms, positive and negative. The “up side” to word-of-mouth advertising is that in addition to being free, it’s credible and usually carries no hidden agendas. The “down side” is that if a client is unhappy with your agency, you can be sure he/she will do everything possible to prevent friends and relatives from doing business with your organization. The “deep down side” is that often you don’t even know a problem exists.
Perception is the key to understanding the damage word-of-mouth advertising creates. Consider this scenario: Joe Average stopped at Happy Fast Food to purchase a hamburger. He ate it, watched some TV, and went to bed. He got up, ate some eggs and toast and went to work. Do you think he spent a lot of time talking about the good hamburger he ate last night? Now, consider the same story, except that when Joe went to take his first bite, a worm oozed out onto his hand. What was the subject of conversation the next day?
For the next few days, Joe told everyone he met about the worm-infested hamburger at Happy Fast Food. He had to. It’s human nature. There was no way to stop him. The only solid defense would have been to head off the problem before it became unmanageable.
So what do you do? Even the best-run companies will occasionally create an unhappy client. When you and your employees face an angry and complaining client who threatens to take his/her business elsewhere, you can’t afford to view the situation as bothersome or only as a headache.
Dealing with an upset client offers you two opportunities: (1) To learn what your agency needs to improve; and (2) to make this client a raving fan. Saving clients, then, represents a real gold mine.
WHAT YOU CAN DO
Proactive Client Contact
Studies show that a majority of clients do not complain. Consider this example from the airline industry. An airline lost all the luggage on one of its flights. Twenty-four of the passengers complained. The rest of the passengers didn’t even let the airline know that they didn’t receive their luggage.
A startling 96% of all clients will not complain, and if they have four or five negative experiences with your organization, they’ll simply walk away and you’ll never know why. Regardless of whether they’re trying to avoid conflict or they believe complaining will do no good, these departed clients will engage in the negative word-of-mouth advertising mentioned earlier. This means that your goal must be to increase the percentage of clients who are comfortable complaining to you when necessary. Transform unhappy clients who are non-complainers, and the least loyal clients, into complainers, who can become the most loyal.
Your agency should proactively contact A and B clients on a regular basis. (For a complete discussion of these client segments, refer to my article, “Customer Loyalty and Retention Primer.” The A and B clients make up the 50% of your client base that produces 95% of your revenue.) Create a comfortable and inviting atmosphere so that complaining clients are warmly welcomed.
For the A’s, I strongly recommend a phone call two or three times a year; and for the B’s, two letters a year is a good start. The letters should invite clients to express their concerns, complaints and compliments.
Error Recovery
Anticipate client complaints. The key to success in working with complaining clients is to train employees to communicate effectively with them; which means that your agency needs to initiate an outstanding complaint recovery strategy. Without adequate training and opportunities to practice, employees tend to get upset when clients complain or are angry; they don’t know how to handle these situations.
General Philosophy
Don’t take clients’ upset personally. Don’t get emotionally hooked; they’re upset because of a situation, not because of you. When you let a client “push your buttons,” you lose.
Make it a game or challenge to see how many complaining clients you can turn around. See if you can have the conversation end with their being happy.
Offering on-the-spot solutions from the first person they contact will ensure that 95% of your clients will stay with your agency. If a second person needs to speak with them or if they wait up to 24 hours for a response, only 84% will stay.
Specific Steps
Train your employees to:
- Be empathetic, validate the client’s feelings and offer an apology. Use a soft and soothing voice. Most people are happy with a simple apology presented in an understanding voice. It’s amazing what an “I’m sorry” will do because it doesn’t happen very often.
- Aim to open communication by using probing questions. If the person seems reluctant to discuss the problem, rephrase the question.
- Listen fully. Don’t interrupt or become defensive or argumentative. If you do, it likely will escalate the situation. Take notes, and if “in person,” look up often to maintain eye contact. Show you’re interested and concerned.
- Thank and apologize. When the client has finished speaking, thank him or her for sharing the information. Then apologize again. Most employees don’t know how to say they’re sorry. They aren’t trained to put themselves in the client’s shoes, and they’re not willing to admit mistakes.
- Offer solutions and an extra. Talk about what you can do, not what you can’t do. Put it positively. You probably will need to repeat what you can do a few times in a firm, polite tone of voice. Be generous. Give these complaining clients something extra and “Wow!” them!
An important concept to remember is that you won’t please all people. Do the best you can. With the right attitude, tools and techniques, you can turn these clients into satisfied, loyal “raving fans.” It’s not always easy, but it’s always worth it.
To learn how to be extraordinary, read this brilliant example of complaint recovery from a nightmarish situation. Club-Med-Cancun’s vacationers were heading from New York to their Mexican destination. The flight took off six hours late, made two unexpected stops, and circled for 30 minutes before it could land. Because of the unexpected delays and mishaps, the plane was en route for 10 hours more than planned and ran out of food and drinks. The plane finally landed at 2:00 a.m., with a landing so rough that the oxygen masks dropped from their compartments and luggage fell from the overhead bins. A lawyer on board had already started to collect names for a class-action suit.
Silvo de Bortoli, general manager of the Cancun Resort and a legend throughout the organization for his ability to delight clients, got word of the horrendous flight and immediately created an antidote. He took half the staff to the airport, where they laid out a table of snacks and drinks and set up a stereo system to play lively music. As the guests filed through the gate, they received a personal greeting, help with their bags, a sympathetic ear and a chauffeured ride to the resort. Waiting for them was a lavish banquet, complete with mariachi band and champagne. The staff had also rallied other guests to wait up and greet the newcomers, and the partying continued until dawn. Many guests said it was the most fun they had had since college. Now that’s a recovery which, by the way, resulted in no lawsuits and clients who became raving fans!
Now go and “Wow!” those clients again and again and create raving fans who will be your unpaid sales force!